U.S. government sets new tariffs on China solar panels

View full sizePlain Dealer file Workers assemble solar panels at Hope Solar Power Co. on the outskirts of Beijing, China.

WASHINGTON -- The
Commerce Department is imposing new import fees on solar panels made in
China, finding that the Chinese government is improperly giving
subsidies to manufacturers of the panels there.

The Commerce
Department said Tuesday it has found on a preliminary basis that Chinese
solar panel makers have received government subsidies of 2.9 percent to
4.73 percent. Therefore, the department said, tariffs in the same
proportions will be charged on Chinese panels imported into the U.S.,
depending on which company makes them.

The tariff amounts are
considered small, but the decision could ratchet up trade tensions
between the U.S. and China. Several U.S. solar panel makers had asked
the government to impose steep tariffs on Chinese imports. They are
struggling against stiff competition from China as well as weakening
demand in Europe and other key markets, just as President Barack Obama
is working to promote renewable energy.

"Today's announcement
affirms what U.S. manufacturers have long known: Chinese manufacturers
have received unfair ... subsidies," Steve Ostrenga, CEO of Helios Solar
Works in Milwaukee, Wis., said in a statement. The company is a member
of a group called the Coalition for American Solar Manufacturing.

On
the other side, some U.S. companies argue that low-priced Chinese
imports have helped consumers and promote rapid growth of the industry.

The
new tariffs are low, making the Commerce Department decision "a
relatively positive outcome for the U.S. solar industry and its 100,000
employees," said Jigar Shah, president of the Coalition for Affordable
Solar Energy. "However, tariffs large or small will hurt American jobs
and prolong our world's reliance on fossil fuels. Fortunately, this
decision will not significantly raise solar prices in the United
States."

Members of CASE include California-based SunEdison,
Recurrent Energy, SolarCity and Westinghouse Solar, as well as
China-based Suntech Power Holdings Co.

Commerce said it was
putting off until May 17 a decision on whether Chinese companies are
dumping the solar panels on world markets, selling them below cost.

Also, because the decision on subsidy-related tariffs is preliminary, the amount of the tariffs could eventually be changed.

"Today's
decision by the Commerce Department is a signal that China's unfair
trade practices in the solar energy industry may soon be remedied,
giving American producers a more level playing field on which to
compete," Sen. Ron Wyden, D-Ore., said following the announcement. "As
the administration continues its investigation into exposing China's
subsidies, and especially into the question of dumping, I anticipate
that the tariff margins will significantly swell."

Oregon is the
home base of SolarWorld Industries America Inc., the largest U.S. maker
of silicon solar cells and panels, which has led the U.S. manufacturers'
complaints. It is a subsidiary of Germany's SolarWorld AG.

Trade
tensions with China are especially sensitive at a time when the U.S. and
other Western economies want to boost technology exports to revive
economic growth and reduce high unemployment.

The U.S. and China
are two of the world's biggest markets for solar, wind and other
renewable energy technology. Both governments are promoting their own
suppliers in hopes of generating higher-paid technology jobs.

China
announced its own probe in November, saying it will investigate whether
U.S. support for renewable energy companies improperly hurts foreign
suppliers.

The U.S. manufacturers' complaints have been amplified
by the controversy surrounding Solyndra Inc. -- a California-based solar
panel maker that filed for bankruptcy protection after winning a $500
million federal loan from the Obama administration.

Solyndra's
failure embarrassed the administration and prompted a lengthy review by
congressional Republicans who are critical of Obama's green energy
policies. Solyndra has cited Chinese competition as a key reason for its
failure.

U.S. energy officials say China spent more than $30
billion last year to subsidize its solar industry. Obama said in
November that China has "questionable competitive practices" in clean
energy and that his administration has fought "these kinds of dumping
activities." The administration will act to enforce trade laws where
appropriate, Obama said.

Obama is visiting a big solar energy
plant Wednesday in Boulder City, Nev., part of a four-state swing aimed
at showcasing his administration's energy policies.

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